Environmental quality in Africa and infrastructure development: The mediating impact of the knowledge economy

Abstract The study investigates the impact of infrastructure development on environmental quality and the mediating impact of the knowledge economy in 48 African economies from 2000 to 2020. The Generalized Method of Moment is adopted to control for error term‐related problems and potential endogeneity through an instrumentation process. The following findings are established: First, Infrastructure development enhances environmental sustainability in Africa, through the reduction of greenhouse gasses. Second, it contributes to reducing CO 2 emissions in liquid, solid and gaseous states of fuel consumption. These results hold after considering the infrastructure development indicators of the African Development Bank. Third, the findings further reveal that the transport, energy, water supply, and technology sectors all contribute to enhancing environmental quality. Fourth, taking into account differences in factor endowment, the findings indicate that infrastructure development helps reduce CO 2 emissions in both lowly and highly endowed African countries, except for electricity and water supply in the lowly endowed economies, indicating that the development in these sectors needed to be speeded‐up to enhance environmental quality in these countries. Fifth, the findings indicate that the knowledge economy mediates with infrastructure development to promote environmental quality through the reduction CO 2 emissions. The findings recommend policymakers promote infrastructure development for environmental efficiency in Africa. This is particularly enhanced through the mediation impact of the knowledge economy.